The Amazon Opportunity Marketers Are Missing | Paul Boruta, Founder & CEO, Slingwave

Amy McCarty: Today we're kicking off something new on the incremental marketer. Once a month, we're going to drop a shorter episode where we dig in on a hot topic in marketing, something near and dear to our hearts, whether it's a big industry shift, something making headlines, or just something we think marketers should understand better. And there's a lot happening right now. As you all know, these episodes will give us a chance to drill down and unpack what it all means. So for today's episode, we're starting with the topic that's getting a lot of attention right now, e-commerce. and Amazon advertising. Amazon has quietly become one of the largest ad platforms of the world, yet many brands are still under investing or thinking about it the wrong way. In this episode, I'm going to walk you through why Amazon matters, what makes it different from platforms like Google and Meta, how to hold it accountable because there's waste everywhere and Amazon has it too. ⁓ and where marketers might be missing the opportunity. Most marketers still treat Amazon as a retail channel, not a media channel. And Amazon's actively trying to change that, but it's a gradual process. And I think as we look at the ecosystem where you see opportunities, if you're under indexed on Amazon right now, there's an opportunity to scale that channel for many marketers, both endemic and non endemic. So Amazon's quietly becoming one of these powerful advertising ecosystems that unless you're in the trades, you're not necessarily feeling the beat of, but most of you in this podcast probably know it's now the number three digital ad platform behind Google and Metta between Amazon sponsored ads and DSP and all of the ad products that the company's rolled out. It is a formidable force in terms of professional grade tooling to be able to buy and transact on media across the funnel. but many brands are still allocating a very small percentage of spend there. If you think about Amazon as a bottom of funnel closure, you're kind of two years, three years back. That's what we used to view Amazon as, but it's truly become a full funnel platform and has been evolving rapidly to not just be bottom of funnel, but full top of funnel in terms of display ads, video, streaming TV, prime video. And advanced features that tie in store data out of home, leveraging their assets with whole foods, et cetera. So there's a lot of ad products now that are top to bottom on Amazon. In addition to sponsored products, sponsored brands, the way that users are searching at the mid and bottom of the funnel. So competing really directly with Google meta and TV simultaneously. You can now run a video ad on prime video, drive the consumer into Amazon search, close the sale on the same platform within an ecosystem that actually provides that data top to bottom in terms of how you're able to leverage that data. And by the way, just announced you can leverage Amazon data on Netflix when you're buying your CTV Netflix ads. So you're cutting edge at this point, leveraging the Amazon ad platform. What we see is slow adoption of a lot of those features, especially upper funnel video and prime video. It's so hard to measure in the old world. So we're going to get into what advanced marketers are doing to evolve their measurement and be able to actually capture the signal from what that top of funnel mid funnel push is doing for the rest of their media. But before we get into that, why is Amazon different from the targeting standpoint? There's Clearly Google, you have search intent. It's capturing search intent. There's also other signals that Google captures from YouTube, et cetera, primary signal search intent and what's happening with agentic and Gemini. Meta on the other side is interest and identity, and that's kind of plays to their strengths. Amazon captures purchase intent, and it's at a scale that no other media platform has. It not only knows your intent, but it knows what you buy. So it's not just what you like, it's what you actually bought. And that data is accessible to marketers in a clean room environment in Amazon marketing clouds. So there's some great technologies out there, partners in the Amazon ecosystem that focus on AMC. We believe it's a very strong compliment to a media plan and an attribution strategy on Amazon. It's a key linchpin and we can get into that in a future deep dive. You know, at the moment, someone is searching for a product. They're already halfway to buying or almost all the way to buying. This is a ⁓ major issue in incrementality measurement, which is that search was generated somewhere upper funnel. And it's not that you're walking in the door the first time searching for this and the platform can take credit for that, that they drove it. It's something three blocks up the street that drove you to that store is the out. out of home sign, the video ad you saw the radio spot. You walked in the storefront because of that. And that's really that role of upper funnel at Amazon is filling that funnel, getting more people into the door at the point that somebody's searching for the product. They're mostly convinced that the best you can do at that point is conquest and be a competitor who gets in the way and has something more compelling, more either price or product or messaging. So One thing I think is under sold on the retail media side is the fact that Amazon is the largest retail media network and it just has massive scale in that world. We're very excited about the rise of retail media becomes even more difficult and fragmented to measure. But as you see over the announcements that Amazon's make, it is assembling retail media under its wings. It's got Macy's, it's got other inventory that it's bringing in from. It's whole foods and other inventory. So basically if you think about the linchpin of your retail media network strategy, if it's not anchored in Amazon, you may have good reason, but you should be testing to the extent that it's complimentary to your core business. We've been approached with marketers who are concerned that spending on Amazon will cannibalize their direct to consumer efforts and that direct to consumer focus is. A strategic priority in order to maintain your independence, your growth, your customers, direct access, all legitimate concerns. What we see the best marketers and most sophisticated marketers that can manage channel conflict do is grow both pies at the same time, a dollar spent in direct to consumer influences Amazon and a dollar spent in Amazon. If it's done in the upper funnel can actually influence the other way as well. ⁓ there's meaningful cross impacts in terms of one channel influencing the other, not to mention add in wholesale data, store data, the impacts that a dollar spent on the Amazon ecosystem has across the overall world. So the cross channel impacts are real. They're measurable. We see it in models. We highly suggest that you get into a methodology that helps you quantify that, which we'll get into next. So why are marketers under invested on Amazon? Why do we think that that's the case? The opportunity exists for three reasons. One is operational silos. There's still teams that are the Amazon team, the retail media team, and then there's every other dollar spent through the DTC marketing team or another marketing team. Amazon often sits inside this e-commerce or retail silo. It's been tied to the teams managing the listings, managing inventory. They're maybe not marketers at their core. They're very good at what they're doing from a marketplace and fulfillment standpoint. Marketing is not necessarily their specialty. So these silos get disconnected. And I think when you think about Amazon, if you're a marketer in the world of separating out that spend, it's suboptimally connected now. So you should be thinking about connecting those two organizationally. One, one major block two. There is measurement confusion. So you can not measure the same way on Amazon as you can on programmatic. It's a walled garden. It has different metrics in terms of click and view based windows, and it's very much attributing to your marketplace sales and what you're seeing only on Amazon, not necessarily to your DTC or other sales. So attribution is a huge challenge. Now Amazon's rolling out changes that are helping. There's also some that are hurting its ability to be apples to apples with other channels. I think how view-based attribution has been treated is changing. And I think for the better, but actually new announcements around that just this week, Amazon's rolling out a very different approach to attribution of the second touch, which you were getting a lot of over credit for Amazon DSP in the way that that used to work. And now we're going to see how it. looks in the new model in terms of what is the actual role of the first touch and midpoint touch points is not going to be as easy for marketers who have designed their attribution models around the old method to retrofit. So measurement is the second issue is confusing. It's hard to do apples to apples. And then I think just third is just old mental models. Brands still treat Amazon like it's a store shelf, not a media channel, especially non endemics, anything outside of e-commerce, CPG. That is even considering Amazon as a channel, so under invested there relative to the standard endemics that, you know, there's really a shift to be able to think about how do I embrace a new media platform like an Amazon and reach an auto consumer, someone with a long purchase cycle, not necessarily something you're buying on Amazon, but you can reach that consumer. You're seeing it in your living room all day long, Thursday night football, all of the Amazon prime slate. It's all the non endemics that are. testing this channel, you know, are very early. So there's still an arbitrage opportunity in a way to be early there versus whether you maybe have traditionally spent in programmatic and connected TV and traditional. So organizational silos, measurement confusion, old mental models that it's a store shelf, not a media channel, but where the opportunity is. And I think this is where our company sling wave works hard on this problem, which is How do you actually connect those media channel media exposure to actual purchase behavior and driving revenue? Sling wave is specialized with our partners to help crack that code. So first you need to connect all of your media exposure data into a centralized data warehouse, data lake that you're able to understand over a long time period. And by the way, Amazon's not going to keep your data that long. So it's a limited set of data that you're able to get out of the platform. You need to warehouse it and get it into a long time series. So you're able to model this, ⁓ in parallel with your other media channels in order to capture the full marketing pictures, start there, make sure your team's building a data warehouse, building a data asset that you, you own, you control, and there's partners that can help you do it. Sling wave will help you do it. We will build that and make it. the asset that helps you drive media effectiveness. You're doing that from Meta, you're doing that from Google at the same time. You're bringing in all of your data in a long form time series, and you're also bringing in very detailed data. So the detailed data is sitting in AMC and at the ad group, the sponsored ads, sponsored brand, video, campaign, creative, tactic level. Very granular data all gets put in that same repository and now, You have the ability to look at that across a long time horizon, very much looking at how are you actually seeing the dependent variable, your sales, be influenced by the independent variables, the way you're spending on the platform. And it goes much further than clicks or CPCs. Those are valuable inputs, but they're just interim metrics. You need to connect the exposure to the actual outcome. And a media mix model achieves that. an MMM is first and foremost, one of the best ideas to start with in terms of Amazon measurement. Amazon offers an MMM program. You can get that data from MMM. There's vendors and partners like SlingWave who can help you pull that and more effectively model it. And with an MMM, you're able to look at those trends in terms of what each media channel contribution, either intra Amazon or across all of the channels that you work on, Omnichannel ideally. influences sales or influences your outcome, which can also include leads subscriptions, awareness, other KPIs. And then second is experimentation. So a limitation of Amazon ads in each one of the regions, the listings products, sponsored search, sponsored brand do not have the ability to geo experiment at this stage that may be changing right now. As I'm recording this, the main lever for experimentation is Amazon DSP, which is a powerful lever. You can create causal impact, holdout studies on Amazon that allow you to separate out exposed control and be able to do real life tests of is DSP incremental. And the key is to do that at very different time periods of the year, because incrementality changes with seasonality. It changes with prime day. It changes with holiday. It changes with promos. So experimentation and a rigorous roadmap around doing causal impact geo experiments or fluctuation testing. Slingwave is a leader in this on Amazon and other channels. Slingwave is a leader in experimentation, causal impacts, fluctuation testing, automating this experimentation roadmap for you. We highly recommend that you put this in place for your company as a discipline. And it's not a project, it's a program. Remember when people move on from your company, you want a partner internally or externally that stays with you and is there to help create that knowledge transfer and, really make sure it gets implemented in terms of how you actually use the media. Because we've seen so many companies have an experimentation roadmap that nobody remembers because the person left or they even are still at the company, but they moved to another function. Oftentimes because they're the most experienced data scientists at the company and they're in high demand. So they're not spending their time thinking about this problem as a program. And so we've talked about MMM. We've talked about experimentation. The last piece is just the power of an LLM council and AI model layer that helps you bring in external signals across the entire ecosystem to create this orchestration layer input, which Is such a powerful tool as we are developed at SlingWave. It includes marketplace signals, your competitors, your creative, their creative, what you've done with pricing, what they've done with pricing, all of the elements of promo and, and weather and factors that are not necessarily exposed to you in any ad platform, but are very meaningful in terms of how performance will ultimately pan out. We've had a terrible weather month in the last month. Marketers wake up on a Monday and they say, why is my spend so down? And everybody's scratching their head. And if you had it at their fingertips, knowing that half of the country was under a blizzard, ⁓ you would know that you're actually exceeding what the prediction would have been for that time period. That's what goes into what we call velocity AI. It's real time data. And it gives you that signal in terms of how incrementality is changing based on all of the different factors, not just the media, but external. structured and unstructured. So just to conclude what brands are doing on Amazon that we think is bleeding edge tactical recommendations like treat Amazon like a media channel. It's not just e-commerce. It has grown. is number three is fast, fast growth in terms of market share. And this is, we're talking highly, highly us focused, but there's a huge growth of usage of Amazon in other markets as well. Treat Amazon like a media channel. Don't treat it like just a store shelf, not e-commerce. Integrate everything you can from Amazon into measurement. Leverage the MMM program. Leverage Amazon marketing cloud AMC. Build a long time series asset for your company. And then finally test incremental lift. Not all Amazon ads are incremental. Some are highly non-incremental. So you need to cut the fat. It's as accountable as any other media and it's got waste as well as does every other channel. So you need to be identifying that and proactively optimizing out of it. So Amazon is one of the most powerful advertising platforms in the world. We see it under indexed in our media mix models as a global commentary, not for every marketer, but for most, if you're not there, you should be experimenting. You should be thinking about shifting budget. media landscape is changing quickly and there's a moment in time and opportunities when new platforms are emerging to grab that opportunity. And we're still calling this a new opportunity because of how massive the inventory is. So to wrap, Amazon is becoming one of the most powerful advertising platforms, ecosystems in the world. Many marketers are still treating it like a digital shelf. It's not It's a full media opportunity and the ones that are adopting, especially upper and mid funnel tactics are growing the pie rather than chasing the same consumers and potentially just outbidding themselves at the lower funnel. They're basically, you know, chasing the brand queries that they generated in other platforms. If you're just on the lower funnel. So you need to be generating on the offense. If you don't have a huge budget. It is fine to play defense. It's a great strategy is to conquest, to be thinking about how do you defend your brand? How do you pick very specific categories, which is absolutely enabled by that velocity AI, LLM council, AI layer that we discussed more to come in that on a future episode. But I think the brands that win will be the ones that think about Amazon, not just as a retailer, but as a media ecosystem. And they've graduated into the main program in their organization. It's, it's sitting at the same table as Google meta, traditional and programmatic just for. Context. We hold all publishers accountable with a, with a model at sling wave for incrementality. And that's actually one of the benefits for you to have your own proprietary foundational model, because you can now have that conversation with a publisher like Amazon, a media ecosystem. If it's not working, there's always a request to bring more budget to the ecosystem. When you see it, that this is a clear lane and the model says that you bring it. But if you don't as a marketer, this is a good leverage point to say, I'm not getting what I need out of your ecosystem. I need more either support. need betas. I need value add. What are some of ways that you can help me shift budget in the end? If you don't have a tool that's neutral and agnostic and cross channel, you don't have that. capability to negotiate. I think fundamentally Amazon is a very under indexed in most media mixed models. So there is opportunity to move, but there's waste and there's accountability and there's grading your own homework issues at every platform. So make sure you have the measurement system in place to catch that and to be able to hold the media partner accountable.